Port approves subsidy to keep container business

Port of Portland commissioners have approved an incentive program to entice container-shipping companies to continue visiting the city amid a decline in productivity.

The commissioners voted 7-2 on Jan. 9 to pay $10 per container to carriers who stop at the port’s Terminal 6, a sprawling Columbia River container yard. The program is capped at $1 million and expires at the end of 2013.

The carriers asked for the subsidy to help offset rate increases sought by ICTSI Oregon Inc., the firm that took over Terminal 6 operations in 2011 and is negotiating a new terminal-use agreement. ICTSI Oregon, a subsidiary of a Philippines company, must boost rates because of higher costs, reduced productivity and lower revenue, Port spokesman Josh Thomas said.

More than 1,000 businesses, primarily in Idaho, Oregon and Washington, depend on the container terminal to get their goods to or from international markets. Portland’s Terminal 6 is by far the smallest of the six container-shipping ports on the West Coast. It’s at a disadvantage compared with other Pacific ports because it’s more than 100 miles from the mouth of the Columbia River.

“It became evident that the increase in costs at a time when productivity has lagged was not viable or competitive, so the port is acting to ensure that we can promote continuity of container service in our region,” Thomas said.

The decline in how fast containers are being moved onto and removed from vessels began in May, when two unions got into a dispute over which should perform the work of plugging and unplugging refrigerated shipping containers. Slides presented at the port meeting showed a drop in crane productivity in the past seven months, from roughly 28 “moves per hour” to about 23.

The National Labor Relations Board eventually ruled that the contested jobs belonged to the International Brotherhood of Electrical Workers, not the International Longshore and Warehouse Union. The ILWU, however, has yet to concede.

The longshore union sharply criticized the incentive program in a statement following the vote, saying ICTSI Oregon has mismanaged operations since taking over the terminal and has replaced a positive work environment with a “hostile” one.

“The carriers did not need bribes to come to Portland before ICTSI took over operations two years ago,” the union said in a statement.

Moreover, the union contends that “variations in productivity” are beyond the workers’ control, and depend on management decisions, personnel, physical conditions, the type of ship and other factors.

Thomas said the incentive program will “hopefully buy some time” until permanent solutions to what ails the terminal are found. He said it won’t guarantee that carriers continue calling on Portland in the years to come.

“The do-nothing option was not an option for us,” he said. “The container terminal is mission critical for the Port of Portland, so we couldn’t sit idly and watch business leave Portland.”